GlobalFoundries sells off former IBM design unit

Representatives from GlobalFoundries were on hand to speak to job seekers during the annual Times Union technology, manufacturing job fair on Monday, May 20, 2019, at the Marriott in Colonie, N.Y. (Will Waldron/Times Union) less

Representatives from GlobalFoundries were on hand to speak to job seekers during the annual Times Union technology, manufacturing job fair on Monday, May 20, 2019, at the Marriott in Colonie, N.Y. (Will ... more

Representatives from GlobalFoundries were on hand to speak to job seekers during the annual Times Union technology, manufacturing job fair on Monday, May 20, 2019, at the Marriott in Colonie, N.Y. (Will Waldron/Times Union) less

Representatives from GlobalFoundries were on hand to speak to job seekers during the annual Times Union technology, manufacturing job fair on Monday, May 20, 2019, at the Marriott in Colonie, N.Y. (Will ... more

GlobalFoundries is selling off Avera Semiconductor, the chip-design team that GlobalFoundries acquired back in 2015 when it purchased IBM's microelectronics division.

GlobalFoundries is selling the company to Marvell Technology Group of Santa Clara, Calif., in a deal worth $650 million in cash, plus another $90 million potentially if certain business milestones are achieved.

GlobalFoundries had created Avera out of the group of about 800 engineers that had been IBM's in-house design team. GlobalFoundries gave the unit the Avera name back in October. Avera has $500 million in annual revenue.

Marvell makes "infrastructure" chips found in data centers, cloud computing systems, cars and other devices and systems. Its chips are also used in telecom equipment.

The deal also includes a long-term manufacturing agreement between Marvell and GlobalFoundries. Marvell is a "fabless" chip maker and GlobalFoundries is a foundry that makes chips for fabless companies that don't have their own manufacturing facilities.

This is the third asset sale that GlobalFoundries has done in the last several months, including selling of its former East Fishkill fab, which was part of the IBM deal as well, last month to On Semiconductor.

"This transaction is another example of our commitment to focus on our core business of providing differentiated foundry offerings as a manufacturing service provider, while establishing deeper relationships with customers who are leaders in their respective sectors," said Tom Caulfield, CEO at GlobalFoundries.

Some of Avera's employees work in Fab 8, GlobalFoundries' computer chip factory in Malta. GlobalFoundries spokeswoman Erica McGill wouldn't provide specifics about the number of Avera employees locally, but she said the unit's 800 employees work across three continents.

"While decisions on the final structure have not been made, we can confirm that there are less than 100 Avera employees based in GlobalFoundries' Northeast Tech Corridor, including Fab 8, and are all expected to move over to Marvell once the deal closes," McGill said.

The sale of Avera is good news locally since the manufacturing agreement with Marvell assures GlobalFoundries more work at its fabs.

"This announcement marks another step forward for GlobalFoundries on its path to profitability, which in turn bodes well for Saratoga County, the Capital Region and New York state," said Marty Vanags, president of the Saratoga County Prosperity Partnership. "We applaud CEO Tom Caulfield for defining and executing a visionary strategy that ensures GlobalFoundries remains an industry leader far into the future, and keeps Saratoga County at the forefront of the global semiconductor world."